drbubb

Got it! I have been searching for this chart...

That would be a very good thing for the overall UK economy in the long run, since it will help to liquidate some of the truly mammoth mal-investment in the UK housing market. But as it goes, it will be very painful for BTL investors. If they are smart and see it coming, they would be wise to exit ASAP, before the truly ugly price drops arrive.

DrB: "The assumption that I would question here is Average Household size (will be stable or go on falling.) In a severe recession, I reckon household size will RISE, surprising many bulls. No surprise there. As the housing bubble burst, people were forced out of homes where they could no longer afford the mortgage. Ironically, that made the bust worse, because the overall demand for housing was falling as new homes and apartment that had been contracted for building during the boom continued to be completed years after the peak in the market. Also empty homes tied up in the foreclosure eventually came back onto the market, further adding to the excess supply. America is now working its way through its housing mess, while parts of the UK -such as London - have not even begun to do so. It is going to get increasing ugly in the UK housing market, I reckon.

DrB: "The assumption that I would question here is Average Household size (will be stable or go on falling.) In a severe recession, I reckon household size will RISE, surprising many bulls. No surprise there. As the housing bubble burst, people were forced out of homes where they could no longer afford the mortgage. Ironically, that made the bust worse, because the overall demand for housing was falling as new homes and apartment that had been contracted for building during the boom continued to be completed years after the peak in the market. Also empty homes tied up in the foreclosure eventually came back onto the market, further adding to the excess supply. America is now working its way through its housing mess, while parts of the UK -such as London - have not even begun to do so. It is going to get increasing ugly in the UK housing market, I reckon.

Yeah. That might be a guy working in the City, and it is exactly this sort of "happy chappy" who may get crushed by a stock market crash in the next 2-3 years.

"as you get older you want your own space" But only if you can afford it. Events and public policy may conspire against Old Folks who want to sit in big spaces alone

The assumption that I would question here is Average Household size In a severe recession, I reckon it will RISE

/source: http://advisoranalyst.com/glablog/2010/08/26/new-home-sales-set-a-new-record-low-in-july/

... from DrBubb's Diary ... Remember this chart? What happened since then?... update TLT peaked 2 days earlier than GLD, and on lighter volume than the prior rally, giving an excellent early warning. Interestingly, the signals are even clearer using the Intraday charts ... update I am short Bonds now - through being long TBT and TBT calls. Perhaps when I cover my positions there, I will move straight into calls on GLD. It could be an interesting ride !

Here's a long term SLV chart I shall be watching ... update

They are doing their jobs! When prices "go parabolic", the risks get higher and they SHOULD raise margins. As the writer said "as we expected". The real problem for the gold market was the one-way speculative move into gold

Yeah- Two targets, as posted on the other thread. But actually, nothing guarantees that prices will not slip below that. This is an old pattern that we saw in 2008, where Gold peaked several weeks after copper. Maybe we will see a correction as big as 2008... or even larger Without wanting to sound a braggard, I called this top well, missing only by a few days I also wrote about: "Reaching for the sky before clawing the air." It's all down to staying aware that a "parabolic move up" sews the seeds of a big drop. We should have all learned that by now, and PD had started a thread to help people get ready for the Turn. What strategies would have worked? In the Silver drop, the thing to wait for is a low on high volume, followed by a bounce and then a lower low on light volume. Until you see that, there is no reason to thing about buying. And if you sell a call now against your long position, I reckon you can use the money later to buy a better call at a lower price later (on the low volume retest.)

From the calling the Top in Gold thread Volatilities in Gold are still "sky high", and it is not too late to sell some calls

WE just came off a year which included a "bounce" in prices, so it does not look so bad. In fact, I good "selling opportunity" was provided to those quick enough to catch it. But we are likely to be headed into something far more negative

THey can stay put, and watch their remaining wealth erode... Wealth destruction the new normal Allister Heath, Wednesday 24th August 2011 WEALTH preservation is now the name of the game in the West. The challenge, for most people, is not to make more money: it is to try and preserve what they have. Declining equity and property prices, ultra-low interest rates, lowish pay rises, elevated inflation and increasing taxes are combining to squeeze nearly everybody. This shouldn’t come as a surprise: the UK economy shrank by about six per cent during the recession; and there has been far too much borrowing from future expected production to fund consumption today. A country that produces less (which is what it means to have a smaller economy) must consume less; the value of its land and companies will also be worth less. There is wealth destruction almost everywhere one looks. Inflation on the retail price index is at five per cent: the real value of everything is falling by that amount. Take cash. To beat inflation, a basic rate taxpayer needs to find a savings account paying 5.50 per cent, a 40 per cent taxpayer needs to find an account paying at least 7.33 per cent, and somebody paying the 50 per cent tax rate...well, they shouldn’t even bother. Basic rate taxpayers can choose from just eight accounts that negate the effects of tax and inflation, all of which are fixed-rate ISAs; in the main, it is a disaster for savers, especially for those who have cash that is not eligible for tax protection and who pay higher rates of tax. Moneyfacts calculates that the effect of inflation on savings means that £10,000 invested five years ago allowing for average interest and tax at 20 per cent would have the spending power of just £9,374 today. Average total pay is increasing at 2.6 per cent a year, which translates into an annual real pay cut of around 2.4 per cent. No wonder an Ipsos Mori poll for the Resolution Foundation reveals that just 48 per cent of people in low-to-middle income households have cash left over at the end of each month. Just 27 per cent of these make monthly savings. The middle classes are also being hammered. What about property? Prices in London, especially in prime areas, are holding up or even increasing as a result of global demand from investors keen to protect themselves against instability. But across the UK, they are down 0.3 per cent over the past year – which in real terms is a drop of over five per cent. Residential property in the UK as a whole has further to fall, especially in real terms; prices have yet to readjust to earnings.

THEY FELL IN LOVE WITH A HOUSE... now they are "prisoners of love" The property ladder can be a trap This is money: Low house prices trap a quarter of all mortgaged homeowners A quarter of all mortgaged homeowners find it almost impossible to move house or take out a new deal. Figures from trade body the Council of Mortgage Lenders (CML) show that more than one in twelve borrowers — some 827,000 — are in negative equity, i.e. meaning they owe more on their mortgage than their house is worth. Yet a further 1.7 million, roughly 17 pc of mortgage holders, have less than 10 pc equity in their properties, according to Money Mail research. Many of these people took out mortgages with just a small deposit before the credit crunch, and are now trapped because their house price has fallen. Henry Pryor, an independent estate agent, says: ‘These people are prisoners in their own home and may be stuck on an expensive mortgage deal.’

What's the crop? They look like fruit trees. That's an expensive way to grow some fruit

And I though my view from the 50th floor in West Kowloon was high ! Actually, I have been up to the bar on ICC-110 and the view of Central etc is fantastic, but you can only see about 180 degrees. I am keen to see the 360 view someday

2012 Olympics- could be racing in with a Gold medal winning Property Crash Heres' another:

2012 Olympics- could be racing in with a Gold medal winning Property Crash Heres' another:

(maybe they can put Benefits tenants in these empty towers): The slow dawning of reality - This article in today's SCMP may help: Tenants scarce for skyscapers Tuesday, 23 August 2011 (5 hours ago) "A boom in central London skyscraper construction risks being undermined by global economic woes that have turned speculative developments into gambles due to sparse tenant appetites... The Shard, the Pinnacle*, the Walaki Talkie, the Cheesegrate and the tower at 100 Bishopgate are at varying stages of construction... with Heron Tower: Together they will add 3.7 million sf of office space by 2015." . . . Bulletpoints: ============ + Companies are hesitant to sign leases for new offices + "The phone has stopped ringing in the City market, but please don't put my name to that," one broker said. + Overs are more upbeat: "Average rents for the best offices was likely to hit GBP-66 psf in 2015, up from GBP-50 now," said property broker Savills. + Job cuts that financial services companies and banks have announced would further weaken the hand of developers. + About 4.9 mn sf of office space would come on the market by 2014 === === === *There are 9 structures actively under construction in London that will rise at least 100 metres (328 ft) in height. The tallest of these at 310 m (1,017 ft) is Shard London Bridge, which began construction in February 2009. The next tallest is the 288-metre "Pinnacle" which will form the centrepiece of the City skyscraper cluster. "Architecture must surprise and delight." "The projecty is destined to be a great success." (haha - sure it will)

(maybe they can put Benefits tenants in these empty towers): The slow dawning of reality - This article in today's SCMP may help: Tenants scarce for skyscapers Tuesday, 23 August 2011 (5 hours ago) "A boom in central London skyscraper construction risks being undermined by global economic woes that have turned speculative developments into gambles due to sparse tenant appetites... The Shard, the Pinnacle*, the Walaki Talkie, the Cheesegrate and the tower at 100 Bishopgate are at varying stages of construction... with Heron Tower: Together they will add 3.7 million sf of office space by 2015." . . . Bulletpoints: ============ + Companies are hesitant to sign leases for new offices + "The phone has stopped ringing in the City market, but please don't put my name to that," one broker said. + Overs are more upbeat: "Average rents for the best offices was likely to hit GBP-66 psf in 2015, up from GBP-50 now," said property broker Savills. + Job cuts that financial services companies and banks have announced would further weaken the hand of developers. + About 4.9 mn sf of office space would come on the market by 2014 === === === *There are 9 structures actively under construction in London that will rise at least 100 metres (328 ft) in height. The tallest of these at 310 m (1,017 ft) is Shard London Bridge, which began construction in February 2009. The next tallest is the 288-metre "Pinnacle" which will form the centrepiece of the City skyscraper cluster. "Architecture must surprise and delight." "The projecty is destined to be a great success." (haha - sure it will)

Has the GOLD Begun its CORRECTION ? The size of the Drop, and the Big volume today would suggest so... (Gold was: $1829.60 -68.50, vs. Peak of $1914 yesterday) GLD: $177.61 -$6.98 : GLD-chart Open: 182.245 / High: 183.82 / Low: 177.50 Volume: 53,856,087 Percent Change: -3.78%

Low for the year: 52 Week Range: 0.97 to 1.74 - NNVC-chart NNVC touched $1.00 om Aug. 10th

Interesting This is useful in refuting the EA claim: "Prime London prices only every rise." I do wonder what the drivers are here?